Taylor Morrison Home Corporation (NYSE: TMHC), a national homebuilder and developer, today announced the closing of its acquisition of AV Homes (NASDAQ: AVHI). The complementary land and community portfolio AV Homes offers marks a significant new phase in Taylor Morrison’s growth strategy.   

Highlights:
• Purchase multiple of approximately 1x book based on implied value of total consideration at closing  

• Enhanced scale in five overlapping markets: Orlando, Phoenix, Charlotte, Raleigh and Dallas-Ft. Worth, and the addition of Jacksonville

• The combined company will hold a top five position in six markets and top 10 in 14 markets

• Strong 55-plus land positions in Orlando, Phoenix and Raleigh

• Growth into the more affordable, first-time buyer segment

The combined company is expected to generate approximately $5 billion in revenue in 2018, with a portfolio of approximately 54,000 owned and controlled lots and 350 active selling communities at time of close. In 2017, Taylor Morrison and AV Homes closed 8,032 homes and 2,491 homes, respectively.

“When we set our sights on growing our business, we were looking for a builder whose footprint overlaid neatly with ours and could take us deeper into the top housing markets we operate in today,” said Sheryl Palmer, Taylor Morrison chairman and CEO. “This deal represents a leap forward at a time when macro fundamentals favor housing and support Taylor Morrison’s smart-growth roadmap. The combined business broadens our target market with more options for first-time and 55-plus buyers, two consumer groups AV Homes served well.”

Growth in the more affordable first-time buyer segment—including growing the affordable active adult product offerings—forms a key component of the company’s long-term vision. The improved range of affordable options follows the homebuilder’s independent market research that revealed significant consumer demand for balancing home price with lifestyle and experiences.

The deal expands Taylor Morrison’s local scale and market share in five in-demand overlapping markets, boosting its status from top 10 builder to top five or higher in Phoenix, Dallas-Ft. Worth, Charlotte, Raleigh and Orlando. With greater access to scale efficiencies and a continued drive for operational excellence, the company anticipates top- and bottom-line performance improvement, in addition to synergies from overheads, increased mortgage capture rates and local and national purchasing opportunities.

The acquisition of AV Homes increases Taylor Morrison’s workforce by approximately 20 percent. The company’s comprehensive integration plan is aimed at delivering a seamless employee onboarding experience while quickly capturing savings and operational efficiencies.

“We are thrilled to welcome AV Homes team members to the Taylor Morrison family, and are excited to work together to make the transition into our culture, technology environment and operations as seamless and productive as possible,” added Palmer.

Throughout the integration process, the business will continue to focus on leveraging strategic growth to enhance the customer experience, including expanded affordability in core locations and a more personalized technology-enhanced homebuying journey. 

Citigroup Global Markets, Inc. served as the financial advisor to Taylor Morrison and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as Taylor Morrison’s legal counsel. JP Morgan Securities LLC and Moelis & Company LLC served as the financial advisors to AV Homes and Wachtell, Lipton, Rosen & Katz acted as AV Homes’ legal counsel.